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Week ended 6th May, 2011 – Markets this week .

In the early days of this week market got some positive clue from Bin Laden news but it couldn't carry-on this gain due to bad news Europe and for  sudden crash in commodity prices.  Most markets were negative this week.


INDEX
6th-May-2011
4/29/2011- 5/6/2011
4/22/2011- 4/29/2011




DOW
12638
-1.34%
2.43%
FTSE
5976
-1.53%
0.84%
CAC
4058
-1.16%
2.11%
DAX
7492
-0.29%
3.00%
NIKKEI
9859
0.10%
1.72%
HANG SENG
23159
-2.36%
-1.73%
AUS
4743
-1.65%
-1.83%
SHANGHAI
2863
-1.64%
-3.28%
SENSEX
18518
-3.22%
-2.38%
BOVESPA
64417
-2.59%
-1.38%
RUSSIA
6707
-4.54%
-3.18%
INDONESIA
3798
-0.54%
0.47%
KOSPI
2147
-2.05%
-0.22%
STRAITS
3099
-2.51%
-0.46%
THAI
1050
-3.93%
-1.08%
ARGENTINA
3315
-2.67%
-0.20%
S. AFRICA
31454
-4.20%
0.54%




Vietnam lowered it’s GDP growth forecast and raised  it’s inflation target. RBI hiked it’s interest rate by 0.50%, which is 9th time since march 2010. Indonesia’s economy expanded by 6.5% in the first quarter of this year due to good performance in consumption and investment areas. Consumer price in Philippines rose by 4.5% in April. South Korean inflation has risen less than forecast. Domestic car sales of Japan were much lower than earlier month. Shortage of parts is one of the problem, few days ago S&P downgrade auto sector.

Better job data from US in April as employers added more jobs than forecast. Due to weak dollar US manufacturing output  grew in last month as American goods become cheaper in overseas. China’s manufacturing growth slowed in April which many are seeing a government effort to slow the economic growth on this hope that it may reduce inflation. Uk’s manufacturing index fell in April to a 7 month low, one of the main cause is decreasing construction order.  Bank of England kept it’s interest rate at 0.50%, inflation fell in recent time but it is still double than bank of England’s target level.  Higher output in Germany and France helps  in manufacturing growth in Europe in April.


Other markets

We cannot forget the fact that commodity prices went up too fast and some of them  are in their highest levels. I don’t like FED’s monetary policy, as it ruined many investors during last few days. Actually it was long due and perhaps we all knew the outcome.


COMMODITY
6th-May-2011
4/29/2011- 5/6/2011
4/22/2011- 4/29/2011




Nymex  (June)
97.18
-14.70%
1.46%
Brent Crude (June)
109.13
-13.31%
1.53%
Natural Gas  (June)
4.235
-9.85%
5.19%
Gold (June)
1491.6
-4.16%
3.55%
Silver (June)
35.29
-27.37%
5.46%
Copper (June)
396.95
-4.86%
-5.38%



Correction was due but this type of massive correction in some assets in such a short-time is perhaps overdone. Though there can be many explanations of this fall but I think the stronger one is that ECB factor.

Breaking 106 support level was the crucial indicator for Nymex Oil, it has a good support around $97. If in coming days Nymex Crude does not able to break this 97-98 region then it has a chance to go up. But if again start to fall then it has a support around 95 and then around 91-92 region. For Brent Crude crucial support was at 116 level, it gets a minor support at around 108. But again I am saying that if commodities start another round of corrections then it may find support at 104 and then at 99 level. Though it looks to me that Oil will be up in coming week but I am not sure about the correction phase that is going on. Right now thought it is in very early stage but Oil may be making a pattern here.

I have posted something about Silver in the same day when corrections have started, I told about the lower support rang of $34 and it was perfectly on the spot as Silver get good support around $34 range. But if correction phase continues then it can go as low as $30 and then below $27. But like crude I have a positive opinion on Silver too, as such last day it gave a positive closing. If it gives closing above $39 then we can expect some positive move from Silver, but for those investor who just lost lot of moneys it will be too far for them.

Gold has not corrected much like Silver. First I want to say about the pattern that I wrote few weeks ago worked very perfectly for Gold. Now $1470 is working as a good support for it, if it breaks it as a part of correction in commodity then it will find a good support at $1440 level. Right now it looks to me that Gold is moving on a channel, but who knows what is next for after Silver !
Somewhere I saw that someone from German side urged Portugal to consider selling some of their Gold reserve to ease its debt problem as Portugal has big Gold stash of 382.5 tones worth $20.7 billion which is equal to 9% of their GDP. Now if those selling really start then Gold will be down in coming days.

Last week I was talking of completion of a bearish pattern in Copper chart. This week’s move truly reflect the pattern. Now it is in another pattern and if things get worse it can even look for support around $400, but there may be some pull back and it will find resistance around 428.



Coming week

Last week I said that I was not very glad with the Dow’s high volume move in 29th April and I was expecting some corrections, this week it works perfectly. Now 12400-12500 level is very crucial for Dow, this week it found support at 12500 level. Right now it is facing very near resistance at 12700 level.
Some important reports are due in coming week, so until those are coming especially Trade deficit data, I do not think market will move in any direction. Since Dow is not moving fundamentally so its move can be quite different from here. I am expecting side based movement for Dow and those reports will show future actions.

Inflation fever and global uncertainty really haunting Shanghai Composite. If market does not improve then it can go past 2800 and then up to 2700 level . Right now it is finding support at 2850 level and 2900 is immediate resistance on the upside.
For Bovespa I was talking about support at 64000 level as such it find that support at 63500. Last day’s close was very positive, as their currency recovers little bit, there is  a chance it may again test 66000 level. But if things remain bad it is going to test its support at 63000 and then at 61000 level. But there is a chance of going upward.
Last week I was little more positive about DAX index but it followed the global trend. But last days move was very positive and it shows the strength of German economy. Due to ECB factor it is finding lower support but still now I will be looking some up move from DAX  unless some new obstacle comes from EU.



Reports due next week

Tuesday 10th May,2011 – Import/Export Prices

Wednesday 11th May,2011 – US Trade Deficit

Thursday 12th  May,2011 – Unemployment Claims, Producer Price Index, Retail Sales.

Friday 13th May,2011 – Consumer Price Index, Consumer Sentiment.


Some experts were telling during last few weeks that Precious Metals can go only in the upside from here as they are seeing Gold around $2000, Silver around $75. Investors were jumping into the commodities whenever there is a correction, but now  probably some investors get the test of sudden crash and how things become difficult to exit from holdings.
I think investor and trader should learn from this, as situation in stock markets are quite similar with that of commodity market.
Somewhere I saw that more than  80% of Americans believe the economy is in poor shape!
In this moment one thing is sure that if Crude Oil gives this type of lower closing then in coming days we are going to see some good opportunities in Oil sensitive sectors.




NOTE :  Please see the disclaimer below this blog.

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